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Inefficiencies easily creep into your finance organization when you’re looking the other way. New hires, changes in the company’s direction, advances in technologies, the passage of time, and meetings, meetings and more meetings all take a toll on the organization’s ability to run as efficiently as possible. Before you know it, you have redundancies, blocked process flows, outdated systems and employees who are either bored or overwhelmed with their jobs.

Whether you’re new to your role and you’ve been asked by management to uncover inefficiencies or you’re taking initiative to find them on your own, consider taking the following steps. You have some hard questions ahead of you, plus some homework, but the results will be rewarding.

1. Know the status quo

Your routine may be so tied up in meetings and issue resolutions that you may have lost a hold on what all your employees do for their day-to-day activities. It’s understandable—passing time, shifts in direction and modifications in roles, plus an increasing number of staffers can make any manager distant from everything that goes on under his or her watch. For the purposes of uncovering inefficiencies, though, you have to figure it out. Learn what everyone in your organization does and how they get it accomplished.

You can go about this in several ways: One approach can be to ask your employees to write out their own job description for you. The caution with this method is that many staff members may not give themselves full credit for all the considerable work they do.

Another, somewhat easier approach is to have the staff interviewed by an impartial third party. That way, you’ll be documenting all the tasks and how they are completed, along with inquiries from the interviewer about why each task is relevant and how it connects to other processes or tasks. You’ll also be getting a sense of the time it takes for each task plus a clear sense of who you are most dependent on. Take the time to also understand the process flow—how exactly all these things get done.

2. Understand your organization’s skill sets

After you have conducted your interviews, you will have a better understanding of what tasks are getting done, what’s working well and what could be improved. It may become apparent to you that you need an analyst with stronger Excel skills or your project manager is not really gaining cooperation from others and consequently a particular project isn’t moving along as quickly as you would like.

As you review the jobs and the staff assigned to them, explore whether some people have room for improvement within their current roles or whether they would be better suited for a different position. Some of the telltale signs that you need to make a change: when a staffer is continually late to work, has a disgruntled attitude, or misses deadlines on assignments or does not complete them at all. Such issues commonly arise when a smaller company grows to a larger size. Some people outgrow their original roles, they haven’t been trained to take on the new skill sets that are required, or they may lack the experience necessary for what has become a global or public company.

3. Get a handle on the systems

Anyone who works in finance lives and dies by their data. But having data does you no good if you can’t access it. If you have lost touch with how your own team deals with and processes data, make sure that you understand the systems that are holding your critical data along with the processes to update it. Check that your process flows are complete and include what systems are used and whether any tasks are getting done manually. If you see that systems are down more than up, this should be an indication that something is not right. Do the users have trouble using the system, and how often?

This is an instance where you don’t need to be an expert yourself. You can rely on outside expertise to advise you on systems for your industry and size (based on the number of transactions). These experts will be able to make you aware of new advances in technology, to ensure your team has access to the most efficient tools that can give all of you the most up-to-date information possible.

4. Record your observations

As you go through tabulating the people, the processes and the technology at your disposal, keep track of anything that could be redundant. Can that redundancy be streamlined with process changes or system updates? You may discover that critical data is held captive in your current system and many work-arounds are required to obtain this data, not to mention manual labor. Or do you need a process change?

Process changes sound easy, but you and I both know that getting people to change can sometimes be a challenge. Be sure to outline goals for any changes that you want to implement, while it’s top of mind, and think about the “what’s in it for me” that you can tell your staff when it comes time to request the change.

5. Make your list of recommendations

Whether you’re making a list of recommendations for yourself or a list you will be sharing with others in management, tier them by most critical, essential and nice to have. This will help you prioritize and give others a clear indication of the impact to the organization.

This entire process is a lot of work and may require some tough decisions. But it’s an opportunity that should be embraced. The types of improvements you’ll uncover will only make the overall organization stronger.

Salena Oppus has been a member of the RoseRyan dream team for over 15 years. Her specialties are system planning and implementation, cost accounting and forecasting.

It’s that time of year again. Remember last year, after the auditors came and went, when you promised yourself next year would go a lot smoother? Well, here we are, with an opportunity to set up all of your department’s information as organized and as clean as possible so that you can keep any bumps between your team and the audit team to a minimum. To help with this process, I have put together a list, primarily for accounting managers, to prepare for the year-end audit.

Be sure you are on the same page as the auditors: Every quarter, you have provided documentation per the audit request list (also known as PBC, or Prepared by Client). Check with the auditors that they will be using the data that you’re taking the time to put together for them. Oftentimes, those of us who are tasked with working with auditors find out only after we have provided a schedule with multiple tabs of information that they will not be using those tabs. They may instead rely on other data points they have collected over the year or they are just not fully aware of the additional information. Communication here will prevent everyone from wasting time.

Take a look back at the past year: In the preparation of year-end, review the information that was provided to the audit team on a quarterly basis as well as any comments the auditors or your internal SOX team made afterward. Keep in mind quarterly reviews do not necessarily find all issues or errors. They are more likely to crop up during the year-end, when the audit team really digs into the details.

Check your work: When creating the year-end schedules, look at the logic of the worksheet, the formulas used in each calculation, and verify the totals match the financials. Hint: if using Excel, select the “formulas” tab and select the “show formulas” option. This will change the worksheet from showing the resulting number to the formula used in each cell. Look for any changes made since the last quarter’s review in methodology, calculations, method of gathering the data (because of a different report or an updated system), or presentation on the schedule. Then, if you are the person creating the audit schedules, have someone else take a look who is familiar with the process. That person will probably find little things that you didn’t see simply because you are too familiar with the information.

Address any mistake in the schedule ahead of time: If a discrepancy is found during the internal review process, create a new year-to-date schedule by quarter with the changes identified, documented, and quantified. Discuss your findings with management so they can determine if the changes are material and how best to communicate them with the audit team.

Be organized: Make an audit binder or a folder on your secured internal site with the schedules and any information that would help someone else prepare them. Keep track of when you submit your schedules to the audit team and what version you give them. If there are any questions, you will both need to be looking at the same schedule.

Don’t forget about the effect on the first-quarter review: Lastly, when creating your first-quarter review schedules, verify they contain any updates from the year-end review – both yours and the audit team’s. In other words, don’t automatically pull the previous first quarter schedules to use.

These tips will hopefully make your audit process much smoother than last year. For more information about this topic, check out our intelligence report Audit time? Don’t sweat it.

Monica Zorn is a member of the RoseRyan dream team. She specializes in controllership issues, reconciliations and audit prep, and SOX.

RoseRyan’s nearly 20 years of helping Silicon Valley companies have shown us a thing or two about what it takes to make it here. We didn’t want to keep all that insight to ourselves, so we’ve compiled some of our best observations and advice in our new report, Strategic Finance in Action: How Dynamic Silicon Valley Companies Seize Opportunities (and Avoid Flameouts).

Our report recounts responses to real-life challenges that show how strategic finance thinking in action can make the difference between struggling and thriving. The upshot: a business-savvy finance team that can see beyond the numbers and outside the cubicle is a fast-moving company’s BFF.

Some of the scenarios we get inside include:

A life sciences company with a promising drug nearing payoff (they think) is contending with a business IT system that makes day-to-day operations a frustrating slogfest. What’s the next move?

A hot social media start-up is taking off, but their young staff lacks the chops to keep pace—and they’ve sprung a cash leak. Can they plug it? Could they have prevented it?

A tech company with game-changing technology needs to scale fast to meet demand, but the capital well is drying up and a decent revenue stream is only a gleam in the CEO’s eye. How to stay afloat without missing the market?

Can you relate? Check out our report to see what happened. And you’ll learn about other strategic finance solutions in capital efficiency, business information systems, process optimization, and people and culture. We hope you enjoy it.

There is no fixed form for a financial model, as it is always tailored for the type of business, and various models serve different purposes. However, a good design that is easy to follow and allows smooth data flow has a big impact on the model’s scalability and efficiency of use.

An integrated model that contains BS, PL and CFS is usually desirable for forecasting, as it reflects a more complete picture of the business. I’d like to share a few ideas in structuring this type of model. There is no right or wrong—the best structure is defined by the business and how good users feel about it.

Keep it neat and simple. Try to minimize the number of tabs, as long as the source data and inputs are categorized organically to support the final output. Navigating through too many tabs will make it hard to find your way back. Keeping similar information in the same tab can enhance efficiency and accuracy. I’ve seen models break output financials into BS, PL and CFS by month, quarter and year, which ends up creating nine tabs for similar information. Instead, data can be sorted into two tabs: a master sheet with BS, PL and CFS by month, which serves as a data pool; and a reporting tab customized to the layout you wish to see, such as financials by quarter, by year or both, with ratios and so on. You may also find that consolidating BS, PL and CFS into one tab will enhance visibility of data links.

Place assumptions in applicable worksheets. You may often see modelers put all assumptions in one tab in an effort to keep things looking neat and tidy. However, when the model grows larger and more complex, the artificially created inter-sheet links will require extra time to navigate and extra effort to scale or revise. For example, in most cases, you will have an operating expenses tab that contains numerous line items that don’t share the same assumption, input and projection method. Creating assumption columns next to these items will give you a straight look of how the projections are made. Be sure to shade the cells so you don’t miss the input areas.

Set up a warning system to trap errors. Ensure all data tie out and reconcile. It is critical to set up cross-check, total tie-out rules to ensure accuracy when flowing through tabs. Conditionally format  any unreconciled data or imbalance in red so you won’t miss it. Since BS often sees imbalance, placing these rules is essential to identify errors at each step and correct them so you don’t walk into a disaster.

Ultimately, the goal is to achieve simplicity in structure so people can follow it easily—to make it look like a book and read like a book. By doing so, you will help users—the CEO, CFO, COO and other top executives—see a much clearer future picture of the business and be able to make better decisions.

It’s been observed that detailed tagging can create up to 10 times more tagging concepts than block tagging. Does it mean 10 times the work? It depends. There’s no doubt that detailed tagging creates more complexity, but the workload doesn’t have to grow exponentially.

Why? You can’t simplify XBRL itself, but you can simplify your disclosures. Not all data are created equal—different data points do not necessarily deliver the same value to users and investors. Streamlining your 10-Q and 10-K filings will not only make life easier for you downstream, it can also translate to real value and transparency for your company.

Before you roll your tags forward for the next quarter, whether for block or for detailed tagging, repeat the mantra, “simplify, simplify, simplify,” and consider these tips for boosting your XBRL data efficiency:

Apply your SEC S-X rules for required line items. Determine which line items must be broken out for each financial statement and condense the others, if possible. Check for all comparative periods and your 10-K to ensure consistency.

Maintain the accounting concept in its pure form. Use the narrowest tag definition to map your accounting concept and consider reclassifying immaterial items into a general or miscellaneous category. This will enable “flow-through” elements (facts that appear in multiple places) to tie-out between your core financials and footnotes throughout your XBRL files.

Restructure footnotes and mirror them in accordance with the taxonomy hierarchy. This will avoid the use of unnecessary extensions on footnotes (for example, you might be able to consolidate the different types of stockholders’ equity into one footnote).

Centralize your significant accounting policy under one footnote. Identify all your significant accounting policies embedded in other footnotes and consider reorganizing them into one central footnote to facilitate review and tagging completeness.

Convert numbers within narratives to tables. A picture (or table) is worth a thousand words. This will enhance presentation, tagging completeness and efficiencies.

Last but not least: whatever you do, always get buy-in from your auditors, disclosure/audit committee and investor relations team—you want to reset expectations to avoid surprising them.

There is no cookie-cutter approach to redesigning your SEC filings—it’s more of an art than a science. Remember, it’s quality, not quantity, that counts.

However you look at it, when it comes to XBRL, less is indeed more.


In my work with smaller companies I’m seeing that there’s still much more they can do to strengthen their control environment, create efficiencies and reduce compliance costs in their SOX 404 program by taking a top-down risk-based approach—focusing more effort in higher-risk areas and relying on preventive and monitoring controls in lower-risk areas.

While the Dodd-Frank Act of 2010 eliminated the requirement of an external audit of financial reporting controls for nonaccelerated and small-company filers (companies with a public float of less than $75 million), they still need to document, test and certify valid internal controls. And they have to comply with the same complex accounting requirements (revenue recognition, equity accounting, inventory and asset valuation, etc.) that big companies do, but often they have limited technical accounting resources.

If you’re in this category (and even if you’re not), you should take a fresh look each year to identify the processes and controls that pose the greatest risks for errors in your financial statements. When you know where your greatest risks lie, you should spend the most time and resources evaluating the design and operating effectiveness of controls in those areas, and spend less time on those you’ve identifed as lower risk.

Similarly, small companies don’t always have a second set of eyes to review the accounting for highly complex transactions, so it might make sense to consider having an outside expert assist in their review—you can bring in accounting expertise only when you need it and reduce your risk of error.

Because management has greater visibility of activity across the organization in smaller companies, you have the opportunity to identify and leverage entity-level (monitoring) controls that mitigate financial statement risks for lower-risk processes. As an example, you could rely on monitoring controls such as account reconciliations rather than multiple transactional controls. Relying on monitoring controls that are performed on a weekly, monthly or quarterly basis will require less testing than transactional-level controls, saving time and money.

Taking a risk-based approach to SOX 404 gives companies a real opportunity to focus on what matters most and improve ongoing processes. As a bonus, you can save time and money, too.

There is a simple solution to improve efficiency and I’m surprised how many haven’t tried it: using two monitors. This isn’t a new concept. The AICPA says it can boost efficiency by 50 percent, according to this article from accountingweb.com.

When I need to compare two documents or use information from one window to complete a task in another, I’m far more efficient if I use two monitors. I avoid repetitive toggling back and forth or minimizing and maximizing windows or printing. In addition to the green benefits of working with less paper, consider the time savings of fewer keystrokes and printing time, as well as ensuring you’ve picked up the correct number to paste into the new spreadsheet—I’ll bet you’ve often toggled back and forth several times to check.

Using two monitors, it’s easier to handle these kinds of tasks:

  • Prepare reconciliations. I have the general ledger application screen on one monitor, and can cut and paste quickly to a spreadsheet on the second. And I can compare a prior reconciliation to the current month, which is useful for complex reconciliations. (If you’ve ever prepared or reviewed a tax provision, you get what I’m talking about!)
  • Follow multistep directions. I can read a help screen or an email from the IT department to do something in an application open in the second monitor.
  • Keep an eye on email. I keep my email window open on one monitor to quickly scan incoming emails while I’m working in the other monitor.
  • It’s even possible to put worksheets from the same workbook onto different windows.

It took me only half a day to get comfortable using a second monitor and finding the physical arrangement that worked best. You can stack the monitors one above the other or put them side by side (my preference).

I have a second monitor that travels with me as needed to supplement my laptop. Now I no longer have to squint at small text trying to have more than one window open on my laptop screen. In fact, the larger monitors available today make it comfortable to view four windows at a time.

As more work is done in soft copy, using more complex applications, don’t be surprised if you find yourself wanting a third monitor!